What do international indicators say about innovation?

A country’s productivity and economic performance is linked to its innovation (Productivity Commission, 2023). By comparing how well different countries innovate, we can identify opportunities to improve economic performance and drive sustainable growth. 

Many indices have been constructed to enable this comparison. However, there is little agreement on how well Australia performs. Australia ranks in the global top 10 most innovative countries according to some indices but sits outside the top 100 in others. The difference in rankings leads to divergent views on Australia’s innovation performance.

In this insight, we explore how the Australian Innovation Statistics can help us understand the different indices. 

Australia’s performance varies across prominent global indices

First, consider how Australia ranks according to 4 widely cited indices: 

Source: World Intellectual Property Organization (WIPO) (2023), The Observatory of Economic Complexity (OEC) (2024), Harvard University (2025).

In the Global Innovation Index (GII), Australia ranks 23 out of 133 countries (WIPO, 2023). The GII collates 78 variables to assess both innovation inputs, like institutions and human capital, and innovation outputs, like knowledge creation and diffusion in each country. The Australian Innovation Statistics are built on a similar conceptual framework. We track 6 enabling factors of innovation and 3 innovation outcomes across 34 metrics. 

Australia’s GII rank is the result of our strong performance on innovation inputs (18th) and weaker performance on innovation outputs (30th). Australia places below Japan (13th) and Canada (14th). Examining innovation policy in these peer countries, and frontier countries like the United States (3rd), can reveal useful policy approaches. 

However, Harvard’s Economic Complexity Index ranks Australia 105 out of 145 countries (Harvard University, 2025). Australia sits below all other G20 countries in this ranking. The Observatory for Economic Complexity’s Trade Index ranks Australia similarly (75 out of 132, again last of the G20). 

These export and trade complexity indicators rank countries based on how many products the country exports, and how many other countries export the same products. These indicators are less able to capture the service sector and efficiency of goods production. 

Australia’s service sector is a large part of our economy. However, commodities like iron ore, coal and natural gas account for a large share of our exports. Although we produce these commodities with sophisticated mining processes, they are not unique to Australia. Many of Australia’s niche, sophisticated exports are not captured in these indicators because of their low market share. 

The Observatory for Economic Complexity’s Research Index ranks Australia 4 out of 123 countries, between Canada (3rd) and Japan (28th) (OEC, 2024). Like the other complexity indicators, this index considers the range and uniqueness of countries’ scientific publications. Although only assessing a small part of the innovation system, it highlights Australia’s strong research system.

The Australian Innovation Statistics help us unpack global indices 

We can use a new metric that we have included in the Australian Innovation Statistics, Australia’s exports and imports of intellectual property, to better understand the global rankings. 

This new metric captures charges for the use of intellectual property. This includes outcomes of R&D, licenses for software use and trademarks licensing fees. It shows that Australia is a net importer of intellectual property. The rapid increase in both imports and exports of intellectual property from 2014 reflects growing trade in licences to reproduce computer services, distribute them, or both. This trend is the result of both the growing role of digital technology in the economy and Australia’s strengths in adopting and developing innovative digital products. 

More broadly, absorbing and diffusing global ideas is an important component of Australia's innovation system. This characteristic is drawn out in several elements of the Australian Innovation Statistics and is rewarded in the Global Innovation Index and the Observatory for Economic Complexity’s Research Index. Notably:

• Many Australian businesses innovate by adopting existing technology, which includes applying international intellectual property
• Businesses can use skilled migration to bring new ideas and skills into their work
• Few Australian businesses indicate that accessing knowledge or technology was a barrier to innovation.  

Each global innovation indicator provides unique insight on different components of Australia’s innovation system, and how it compares to its peers. However, alone they don’t tell the full story. Pairing such indicators with AIS metrics allows us to build a more complete picture about Australia’s innovation ecosystem and future growth opportunities.

Sources

Australian Bureau of Statistics (2024a), Australian System of National Accounts – 2023/24 financial year, ABS website. 

Australian Bureau of Statistics (2024b), Balance of Payments and International Investment Position – Australia, ABS website. 

Harvard University (2025), The Atlas of Economic Complexity, The Growth Lab website, accessed 10 June 2025 

Productivity Commission (2023), 5-year Productivity Inquiry: Keys to growth Inquiry report – volume 2, Productivity Commission website. 

The Observatory of Economic Complexity (OEC) (2024), Economic Complexity Index 2023, OEC website.

World Intellectual Property Organization (WIPO) (2023), Global Innovation Index 2024, WIPO website.